Headline profits at the interim stage were flat for Carillion (CLLN). But stripping out one-off costs, including fair-value movements on derivatives and amortisation, left underlying pre-tax profits up 16 per cent at £113m.
Underlying operating margins were down from 5.5 per cent to 5.1 per cent, but this came as a result of much higher contract mobilisation costs as the company started work on a host of new contracts secured in 2014. Order intake in the first half was underwhelming by comparison, falling from £3.2bn a year earlier to £1bn, which management blamed on the general election. But this may reverse: the pipeline of contract opportunities grew from £39.2bn to £40.5bn.
Around three-fifths of revenue is generated in the support services division, which includes facilities management, rail and road maintenance. Revenue here grew by 13 per cent to £1.24bn through a blend of organic growth and acquisitions, notably the 60 per cent stake acquired in Rokstad Corporation in Canada.
Earlier contract wins also boosted revenue by 54 per cent to £326m in Middle East construction services, while the restructured UK construction division showed further signs of recovery. In the latter, a modest decline in revenue from operations in Canada was more than offset by earlier contract wins in the UK, sending first-half revenues up a third to £611m.
Analysts at brokerage Stifel are forecasting full-year adjusted pre-tax profits of £177.6m and EPS of 33.6p (from £172.9m/33.6p in 2014).
| CARILLION (CLLN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 322.5p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 322.5-322.8p | 12-MONTH HIGH: | 371p | LOW: 294p |
| DIVIDEND YIELD: | 5.5% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 211p* | NET DEBT: | 21% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 1.52 | 67.5 | 13.2 | 5.6 |
| 2015 | 1.96 | 67.5 | 12.7 | 5.7 |
| % change | +29 | - | -4 | +2 |
Ex-div: 3 Sep Payment: 4 Nov *Includes intangible assets of £1.65bn, or 382p a share. | ||||
